Hacked ATMs Lead to 70% Rise in Debit Card Fraud

The latest fraud news from the FICO® Card Alert Service, which monitors hundreds of thousands of ATMs and other readers in the US, is bad. In fact, it’s doubly bad:

Here’s some more details: About 60% of the compromises were at non-bank ATMs, such as those in convenience stores. The rest took place at bank ATMs or point-of-sale (POS) devices, such as card payment machines at retailers.

The average duration of a compromise continued to fall — on average, an ATM or POS device would be compromised for 11 days, compared to 14 days in 2015. The 2016 average duration is less than a third of the average duration in 2014, 36 days. The average number of cards affected by a single compromise was cut in half.

What’s behind this startling rise, which is a new record high? Better skimming devices in more people’s hands. If you really want to hack an ATM, you can get your hands on the tech pretty easily. That means we’ll continue to see compromises – and card fraud – rise.

I’ve been asked whether EMV transition is playing a role here. I think it is, but not the role you’d expect.

As ATMs aren’t yet required to be chip-card enabled, the EMV adoption that came into force last year isn’t driving fraud down yet. Instead, we may be confusing consumers — we tell them not to use machines that look funny or have tape on them, and then the cashier tells them to use a POS device that looks funny and has tape on it. You know, machines that look like this:

That said, if you are looking for tips for your customers, here’s FICO’s advice:

Never approach an ATM if anyone is lingering nearby. Never engage in conversations with others around an ATM. Remain in your automobile until other ATM users have left the ATM.

If your plastic card is captured inside of an ATM, call your card issuer immediately to report it. Sometimes you may think that your card was captured by the ATM when in reality it was later retrieved by a criminal who staged its capture. Either way, you will need to arrange for a replacement card as soon as possible.

Ask your card issuer for a new card number if you suspect that your payment card may have been compromised at a merchant, restaurant or ATM. It’s important to change both your card number and your PIN whenever you experience a potential theft of your personal information.